WARD-48(1), NEW DELHI V. BHARI INFRA PRIVATE LIMITED, DELHI

MA 191/DEL/2023

AI Insights

The case involves multiple miscellaneous applications filed by the Revenue against various assessees, challenging the ITAT's earlier decisions that allowed deductions for employees' contributions to ESI/PF. The Revenue's applications were based on a Supreme Court decision in Checkmate Services Private Limited, which established that such contributions must be deposited by the due dates specified in the respective laws to be deductible. The ITAT dismissed the applications, citing that the earlier decisions were in accordance with the law as it stood at the time and that the subsequent Supreme Court decision does not provide grounds for recalling or reviewing the ITAT's orders.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 38153 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-10-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 18-10-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 21-04-2023
• Other Referred Cases: Checkmate Services Private Limited vs. 143 taxmann.com 278(SC), DCIT vs. ANI Integrated Services Ltd., ACIT vs. Logix Heights Private Ltd., Delhi Development Authority vs. Tejpal & Ors., CIT vs. Reliance Telecom Ltd., ACIT vs. Saurashtra Kutch Stock Exchange Ltd., Hiralal Bhagwati vs. CIT, Suhrid Geigy Ltd vs. Commissioner of Surtax
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANDEEP KUMAR MISHRA
• Keywords: Question of law; Rectification of order
• Section: 201; 254(2); 48; 13; 43B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”, NEW DELHI BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT and SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER Sl. No. Misc. Application No. Applicant/Appellant Respondent Asst. Year Assessee by (Shri/Ms.) 1 66/Del/2023 in (ITA No.1732/Del/2021) DCIT, Circle 43-1, New Delhi Globe Management Services, C/o CA M.R. Sahu & Associates, CAs House No.651, 1st Floor, Sector 10A, Gurgaon- 122 001 (Haryana 2018-19 None 2. 67/Del/2023 in (ITA No.1999/Del/2021) - DO - - DO - 2019-20 None 3. 85/Del/2023 ITO, Ward 4 (1), New Delhi B.M. Gupta Estates Private Limited, 5948 & 5948, Room No.2, Basti Harphool Singh, Sadar Thana Road, Delhi – 110 006. 2017-18 None 4. 86/Del/2023 - Do - - Do - 2018-19 None 5. 87/Del/2023 ITO, Ward 4 (1), Delhi Bhansali Udyog Pvt. Ltd., GB-17, Shivaji Enclave, New Delhi – 110 027. 2018-19 None 6. 88/Del/2023 - Do - - Do - 2019-20 None 7. 99/Del/2023 DCIT, Circle 13 (1), New Delhi Lloyd Insulations India Pvt. Ltd., 2, Punjstar Premises, Kalkaji Indl. Area, New Delhi-110 019. 2018-19 KVSR Krishana, CA 8. 102/Del/2023 DCIT, Central Circle 1, New Delhi. R.C. Sood & Co. Pvt. Ltd., 10th Floor, Eros Corporate Tower, Nehru Place, New Delhi- 110019 2019-20 Prince, CA and Ravi Kumar, CA 9. 115/Del/2023 DCIT, Circle 1 (1), New Delhi ATS Infrastructure Ltd., 711/92, Deepali, Nehru Place, New Delhi – 110 019. 2019-20 Aman Garg, CA and Ayush Garg, CA 10. 116/Del/2023 ACIT, Circle 1 (1), New Delhi. Ansal Townships Infrastructure Ltd., 115, Ansal Bhawan, 16, K.G. Marg, New Delhi – 110 001. 2018-19 Satya Jeet Goel, CA 11. 117/Del/2023 - Do - - Do - 2019-20 - Do - 12. 118/Del/2023 ACIT, Circle 1 (1), Faridabad. Asian Wire Forming & Springs, Plot No.30/4, Adjacent Whirlpool India Pvt. Ltd., Wearwel Cycle Compound, NIT, Faridabad-121001 (Haryana). 2018-19 Alok Kumar Gupta, CA 2 13. 120/Del/2023 DCIT, Circle 1 (1), New Delhi. Akanksha Automobiles (P) Ltd., Delhi Road, Moradabad-244 001 (Uttar Pradesh). 2019-20 None 14. 121/Del/2023 - Do - - Do - 2018-19 None 15. 122/Del/2023 DCIT, Circle 1 (1), New Delhi. ACT Industries Pvt. Ltd. B-7, Phase-1, Vivek Vihar Delhi-110 095. 2018-19 None 16. 127/Del/2023 DCIT, Circle 16 (1), New Delhi M. Intergraph System Pvt. Ltd., A-8/66, Kalkaji Extension New Delhi-110 019. 2017-18 V.K. Jain, CA 17. 128/Del/2023 - Do - - Do - 2018-19 - Do - 18. 132/Del/2023 ITO, Ward 34 (6), New Delhi Starlit Suites LLP, Level 4, Regus Rectangle 1 Commercial Complex D4 Saket, Delhi-110 017. 2018-19 Yudhister Mehtani, CA 19. 133/Del/2023 - Do - - Do - 2019-20 - Do - 20. 143/Del/2023 DCIT, CPC, Bengaluru. IE Auto Industries Enterprises Pvt. Ltd. E-4, Model Town, New Delhi-110 009. 2018-19 None 21. 144/Del/2023 DCIT, CPC, Bengaluru. Innovative Facility Solutions Private Ltd., MB-10, Naurang House, 21, K.G. Marg, New Delhi-110 001. 2018-19 None 22. 145/Del/2023 ACIT, Circle 10 (1), Bengaluru Globe Detective Agency (P) Ltd., 601-603, Eros Apartment, 56, Nehru Place, New Delhi- 110019 2017-18 Satya Jeet Goel, CA 23. 146/Del/2023 ADIT, Bengaluru. HV Equipment Pvt. Ltd., J-14A, Sector 63, Noida – 201 301 (Uttar Pradesh). 2019-20 None 24. 174/Del/2023 DCIT, CPC, Bengaluru Surendra Kumar Thakur, K-230, Jahangir Puri, Delhi-110 033. 2019-20 None 25. 175/Del/2023 ADIT, CPC, Bengaluru Compurx Infotech Pvt. Ltd., 201, Jawahar Park, Devli Road, Khanpur, Delhi-110 062. 2017-18 Vivek Kansal, Advocate 26. 176/Del/2023 - Do - - Do - 2018-19 - Do - 27. 177/Del/2023 - Do - - Do - 2019-20 - Do - 28. 191/Del/2023 ACIT, Ward 48 (1), New Delhi. Bhari Infra Private Ltd., C/o Sandeep Bhatnagar, CA, Flat No.12, 2nd Floor, Sheel Tara House, 4866/24, Ansari Road, Darya Ganj, Delhi. 2019-20 None 3 29. 192/Del/2023 DCIT, Circle 4 (2), New Delhi. Cargo Construction Company Private Ltd., 1/9-B, Jindal House, Asaf Ali Road, Delhi-110 002. 2018-19 Ashok Khandelwal, CA REVENUE BY : Shri Sandeep Kumar Mishra, Sr. DR Date of Hearing : 18.10.2024 Date of Order : 28.10.2024 O R D E R PER S.RIFAUR RAHMAN, AM: 1. All these misc. applications were filed by the Revenue involving different assessee’s wherein ITAT has decided the issue of allowability of employee’s contribution towards ESI/PF in favour of the assessee relying on various decisions prevailing at that point of time. Subsequent to the decision of Hon’ble Supreme Court in the case of Checkmate Services Private Limited 143 taxmann.com 278(SC), the Revenue has filed the aforesaid misc. applications with the plea that Hon’ble Supreme Court held that the non- obstante clause would not in any manner dilute or override the employee’s obligation to deposit the amounts retained by it from the employee’s income unless the condition that it is deposited on or before the due date of respective law. Based on the above decision, the plea was made to recall the order and in certain cases to review the ITAT order termed as erroneous. 4 2. The misc. applications were heard together as the similar issue is involved in all the misc. applications raised by the Revenue and the same are being disposed off by this common order. 3. At the time of hearing, all the counsels representing various assessees were present and jointly represented the case and there is an issue raised by them of delay in filing the misc. applications by the Revenue and insisted that the misc. applications filed by the Revenue beyond six months from the date of pronouncement of the order. The issue of delay in filing the misc. applications was rejected at the Bar after considering the submissions of the ld. DR for the Revenue that the order was received by the ld. CIT and the misc. applications were filed within six months from the date of receipt of the order. Considering the decision of various High Courts and coordinate Bench, the plea raised by all the assessees are accordingly dismissed and more or less, in our view, the issue is settled. 4. Ld. Counsels representing the assessees submitted that the issue under consideration is squarely covered by the decision of various Benches of ITAT particularly ITAT, Mumbai, Jaipur and these decisions were subsequently followed by coordinate Bench in Delhi in other cases. They brought to our notice page 112 of the paper book wherein ITAT, Jaipur Bench has considered the similar issue and held that section 254 (2) empowers the ITAT to rectify any mistake apparent on record if the mistake is apparent on record 5 and if the abovesaid mistake is brought to its notice either by the assessee or by the Assessing Officer. The Revenue also relied on the decision of Hon’ble Supreme Court in the case of Checkmate Services Private Limited (supra) and held that Revenue failed to bring on record mistake apparent on record and the Bench has passed the order in accordance with prevailing law at that time/situation and following interpretation of law by various Hon’ble High Courts. 5. Further, they also brought to our notice findings of ITAT, Mumbai Bench in the case of DCIT vs. ANI Integrated Services Ltd. order dated 29.05.2024 and it was submitted that the above said decision was relied by ITAT, Delhi in the case of ACIT vs. Logix Heights Private Ltd. order dated 21.06.2024 and accordingly, dismissed the misc. applications filed by the Revenue. 6. The ld. AR for the assessee - P.C. Sood & Company Pvt. Ltd. brought to our notice para 4.4 of the misc. application wherein Assessing Officer has specifically mentioned that the order passed by ITAT is erroneous, therefore, should be recalled. He submitted that there is no error in the order passed by the ITAT and the comment of the Assessing Officer is not proper and uncalled for. 7. Further, ld. counsel of the assessee in the case of Ansal Townships Infrastructure Ltd. brought to our notice the prayer of the Assessing Officer in the misc. application that the order passed by the ITAT should be reviewed. 6 In this regard, he submitted that there is no power with Hon’ble ITAT to review its own order. Similar prayer was also put forth by the ld. counsel for ATS Infrastructure Ltd.. Further, ld. AR for the assessees heavily relied on the decision of Delhi Development Authority vs. Tejpal & Ors. 8. Ld. counsel for the assessee in the case of M. Intergraph System Pvt. Ltd. brought to our notice prayer of the Assessing Officer in misc. application and submitted that the order of ITAT was pronounced before the decision of Hon’ble Supreme Court in the case of Checkmate Services Private Limited (supra), therefore, the misc. application should not be entertained considering the fact that the order was pronounced much before the decision of Hon’ble Supreme Court came into existence. 9. On the other hand, ld. DR for the Revenue reiterated that the responsibility of depositing the deducted amount of employee’s share from their salaries to the respective agencies before the due date of respective Act, the relevant provisions stresses the responsibilities of the assessee and also relevant provisions of section 2(24)(x), 36(1)(va) and section 43B of the Income-tax Act, 1961 (for short ‘the Act’) are existed prior to the decision of Hon’ble Supreme Court and forming part of the law and nothing was amended or brought to books subsequent to the decision of Hon’ble Supreme Court. Hon’ble Supreme Court has only interpreted the existing law and after interpretation, it cannot be called as a new law. Hon’ble Supreme Court 7 decided the issue and it becomes judicial law. He reiterated that Hon’ble Supreme Court has sustained the addition on the basis of section 2(24)(x) as income of the assessee and time line given to the assessee to claim the same as deduction on payment of employee’s share as per relevant Acts. Therefore, as per the provisions of section 36(1)(va) when the assessee fails to deposit the same the assessee loses the power to claim it as an expenditure. 10. With regard to the reference/prayer of the respective Assessing Officer in the misc. applications to refer the ITAT order as ‘erroneous’ or prayer to review, he submitted that it is only a passing reference and there is no intention to demean the powers of ITAT. He submitted that if required, the Revenue may rectify the above said mistake in the misc. applications filed by the respective Assessing Officers. 11. In rejoinder, ld. ARs of the assessee jointly submitted that there is no failure on the part of the assessees considering the fact that payments were already made before the filing of return of income and he submitted that the Revenue has not highlighted any mistake apparent on record and now the decision after pronouncement of the order by the ITAT cannot be subject to review and the decision of Hon’ble Supreme Court was in fact intended to address new explanation introduced in Finance Act, 2022. They also brought to our notice Finance Minister speech and which is applicable w.e.f. 01.04.2022. 8 12. Considered the rival submissions and material placed on record. After careful consideration of submissions of various counsels and submissions of ld. DR for the Revenue, we observed that the issue of PF and ESI relating to employee’s contribution was more or less settled by the decision of Hon’ble Supreme Court in the case of Checkmate Services Private Limited (supra), wherein it is held that non-deposit of employee’s share of contribution before the due date mentioned in the respective Acts of PF and ESI, the assessee loses the benefit of claiming the same as expenditure irrespective of the fact that the same was deposited before filing the return of income. It becomes rule of law from the date of pronouncement of the decision of Hon’ble Supreme Court in the case of Checkmate Services Private Limited (supra). It is being a fact on record, we also observed that various Courts had decided the similar issue in favour of the assessee when the respective Benches adjudicated the issue. The issue before us is whether the order passed by the coordinate Bench can be subject matter of recall of the order when the decision of Hon’ble Supreme Court was not in existence at that point of time. The Revenue has filed various misc. applications before us based on the decision of Hon’ble Supreme Court on a question of law which has been reversed or modified subsequent to the date of appellate order. Whether can that be a ground for a review of earlier concluded decision? We observed that 9 similar issue was considered by ITAT, Mumbai Bench and decided the issue elaborately, for the sake of repetition, we reproduce the same as under :- “20. We are aware that many of the Co-ordinate Benches have recalled the order of the Tribunal on this issue on the principle of the Hon’ble Supreme Court in the cased of ACIT vs. Saurashtra Kutch Stock Exchange Ltd. reported in (2008) 305 ITR 227. In the aforesaid case the issue was that the Tribunal has passed an order on 27/10/2000 upholding the decision of CIT that assessee was not entitled for exemption u/s.11. Thereafter, the Miscellaneous Application was filed u/s. 254(2) to rectify the error committed by the Tribunal in the decision rendered by any appeal as it has not followed the judgment of the Hon'ble Jurisdictional High Court in the case of Hiralal Bhagwati vs. CIT reported in [2000] 246 ITR 188; Suhrid Geigy Ltd VS. Commissioner of Surtax reported in (1999) 237 ITR 834 which was already available on the date of the order. Thus, non- consideration of binding decision of the Jurisdictional High Court which was not followed by the Tribunal, rather it was not brought to the notice of the Tribunal therefore, Miscellaneous Application was filed and Tribunal had then recalled the order. Against this recalling of the order, Revenue had filed the writ petition which was dismissed by the Hon'ble High Court. Thus, before the Hon'ble Supreme Court one of the question was, whether the ITAT was right in exercising the powers under sub- section (2) of Section 254 on the ground that there was a mistake apparent from record committed by the Tribunal while deciding the appeal and whether it could have recalled the earlier order of the Tribunal on that ground. Thus, the core issue was, whether non-consideration of a decision of the Jurisdictional High Court or of the Hon'ble Supreme Court which was already existing at that time when the judgment was rendered by the Tribunal can be stated to be mistake apparent from the record. The Hon'ble Supreme Court upheld that the Tribunal was right in holding that it was a mistake which can be said to be mistake apparent from the record which could be rectified u/s.254(2). There was no such principle which has been laid down that if after passing of the order of the Tribunal which has attained finality between the parties and in subsequent judgment is rendered by the superior Court, the same should also be recalled within the scope of Section 254(2). Though the Hon'ble Supreme Court had referred to a decision of Gujarat High Court in the case of Suhrid Geigy Ltd vs. Commissioner of Surtax reported in (1999) 237 ITR 834 that if the point is covered by the 10 decision of the Hon'ble Jurisdictional High Court rendered prior or even subsequent to the order of rectification, it could be a mistake apparent from the record u/s. 254(2) and could be corrected by the Tribunal. However, the Hon'ble Supreme Court has referred this judgment and only held that if a judgment is being rendered by any High Court or Supreme Court that means the law was always being the same and if a subsequent decision alters the earlier one, the later decision does not make a new law. This observation of the Court does not lead to any inference to draw that any rectification order u/s. 254(2) can be based on subsequent judgment which comes later on. On the contrary, all the aforesaid judgments of Hon'ble Supreme Court which we have quoted above extenso have clearly held that there would be no review or recall of the order based on the subsequent judgment. Finally, the Hon'ble Supreme Court in the case of Saurashtra Kutch Stock Exchange Ltd. on the fact of the case has concluded as under:- \"In the present case, according to the assessee, the Tribunal decided the 47 matter on October 27, 2000. Hiralal Bhagwati was decided a few months prior to that decision, but it was not brought to the attention of the Tribunal In our opinion, in the circumstances, the Tribunal has not committed any error of law or of junsdiction in exercising power under sub-section (2) of section 254 of the Act and in rectifying the \"mistake apparent from the record Since no error was committed by the Tribunal in rectifying the mistake, the High Court was not wrong in confirming the said order Both the orders, therefore, in our opinion, are strictly in consonance with law and no interference is called for.\" 21. The sequitor of the aforesaid decision of the Hon'ble Supreme Court is that, if already existing judgment of Jurisdictional High Court is not brought to the notice or attention of the Tribunal, then the Tribunal can recall the order while exercising the powers u/s.254(2). 22. Even otherwise also once in the latest decision in the case of CIT vs. Reliance Telecom Ltd. (supra) the Hon'ble Supreme Court have clearly held that the powers u/s. 254(2) of the Income Tax are akin to Order XLVII Rule 1 CPC, then it cannot be held that scope of power u/s.254(2) is beyond and much larger than scope of review as given in the Order XLVII Rule 1 of CPC. In fact, the scope of Section 254(2) is much limited and the scope of review is much wider. Accordingly, in view of the law laid down by the Hon'ble Constitutional Bench of the Hon'ble Supreme Court and several other judgments of Hon'ble 11 Supreme Court cited supra, we hold that order of the Tribunal cannot be recalled based on the subsequent judgment of the Hon'ble Supreme Court when the order of the Tribunal had attained finality between the parties. Consequently, the Miscellaneous Application filed by the department is dismissed.” 13. From the above decision, it is held that scope of section 254 (2) of the Act is very limited and scope of review is much wider. Considering the above decision and the other decisions of coordinate Benches on identical issue, we do not find any merit in these applications filed by the Revenue. Accordingly, all the misc. applications filed by the Revenue are dismissed. 14. In the result, all the misc. applications filed by the Revenue are dismissed. Order pronounced in the open court on this 28TH day of October, 2024. SD/- SD/- (SAKTIJIT DEY) (S.RIFAUR RAHMAN) VICE PRESIDENT ACCOUNTANT MEMBER Dated: 28.10.2024 TS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "